How AI Will Transform the Mortgage Industry

The mortgage industry has been quick to look towards Artificial intelligence (AI) to streamline its processes and efficiency. But the question most lenders face today is how can they adopt this technology and utilize it optimally?

At MReport's webinar titled “Intelligent Lending: The Rise of AI”, presented by AI Foundry, a panel of experts including—Stephen Butler, Founder and President of AI Foundry[1]; Peter Piela, Head of Solution Development at AI Foundry; Rocky Stubbs, Head of Consumer Direct and Digital Mortgage Lending at Flagstar Bank[2]; Rick Bechtel, EVP of Head of U.S. Mortgage Banking at TD Bank[3], and Robert Bush, SVP, Senior Strategy Manager, Citizens Bank[4]—not only answered this question but also gave real-life case-studies of how mortgage institutions were adopting AI to improve their processes as well as cost-efficiency.

Opening the proceedings, Stephen Butler shared his insights into the need for adoption of technology enablers such as AI to make the mortgage industry ready for the future. He also listed some key concerns that organizations grapple with such as where to start the journey, how to execute the technology as well as the role of digital assistants in the future of mortgage.

Addressing the approval times taken for loans, Butler said, “with the use of AI, one-day approvals could be the norm within five years compared to the current norm of three weeks.”

The panel was moderated by Peter Piela. He talked about how AI can create seamless lending experiences using the exponential data that is available in digital format. Though AI is in its nascent stages in many aspects, he said that “it is changing the way we do everything.”

Piela touched upon the use of mathematical and neural networks such as Machine Learning and Deep Learning to deliver promising results on a wide range of problems faced by the mortgage industry. He also spoke about the barriers to the adoption of AI on account of a lack of proven success, and the difficulty in being able to make a clear business case. Social concerns such as privacy and the shortage of expert staff that have a deep understanding of AI act as impediments to the adoption of AI, he noted.

Speaking of the impact of voice technology, Rocky Stubbs pointed out that out of a national survey of 1,000 consumers, 90 percent are aware of the technology, and 72 percent have used voice technology. “It’s an exciting time for the industry. We are rapidly moving from an era of product comparisons to an actual intelligent recommendation process,” he said.

Rick Bechtel elucidated on the Encompass platform, an all-in-one system that consolidates digital processes on a single ecosystem—which helped increase TD's overall agility and enabled faster ability to audit in-process loans and cut down on the time consumed in product deployments.

“Historically, TD was slow to introduce digital solutions in the mortgage arena. As a result, we could not simply begin launching and integrating these technologies–we had to build the foundation in order to deploy digital offerings that would be meaningful to our customers and employees,” Bechtel said.

Addressing some key questions regarding the adoption of AI, Robert Bush, spoke about how organizations can navigate through the process of AI adoption. “Focus on current business challenges across end-to-end experience and then look where AI can be a solution to increase the likelihood of getting AI’s benefits and ensure a better buy-in from stakeholders,” Bush said. Citizens Bank is currently implementing an AI use case in collections for its Consumer Lending business and will shortly work towards implementing this in their mortgage business.